Scientist group: NFA price increase will aggravate situation of poor Filipinos

Posted:

December 3, 2018

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Scientist group AGHAM - Advocates of Science and Technology for the People slams the National Food Authority’s proposed increase in the price of NFA rice, saying that it will only aggravate the situation of the poor.


According to various news sources, the NFA has recently announced that it will increase the price of NFA rice from Php 27/kilo to Php 33 to 35/kilo in order to recoup their losses from selling rice at lower prices.


The adjustment in the price is the agency’s response to the losses that have reached to almost PhP 204,494,462 in 2016 and PhP 81,205,280 in 2017 based on the NFA Statement of Financial Performance. The agency’s selling price was at Php 25/kilo while the operational costs from milling to marketing is at Php 33/kg, which means that for every kilo of rice, there is a shortfall of Php 8/kg. The NFA officer-in-charge Tomas Escarez has defended the proposed increase as a means to achieve a break-even in the financial status of the agency to thwart its ever increasing debt.


“The pronouncement of the NFA is the height of insensitivity amid spiraling prices for basic goods and commodities. Poor Filipino families who already face difficulties making ends meet will be further burdened by price increases in their daily staple,” said Feny Cosico, resident agriculture consultant and secretary general of AGHAM.


Rice Tarification Bill spells trouble for farmers, consumers

The scientist group stressed that the government has continually failed to address the country’s rice crisis, saying that instead of strengthening local rice production, it has instead looked to the passage of the Rice Tarification Bill. This law will replace quantitative import restrictions with import tariffs thereby opening the inflow of imported rice supply in the local market. The group said that this will be detrimental to the livelihood of local farmers faced with unfair competition from imports as well as consumers due to expected price increases.


The bill also seeks for the abolition of the current regulatory and marketing function of NFA in providing affordable rice prices. The state role of regulating the entry of imported rice will no longer be the sole responsibility of the NFA. If implemented, the imports of staple grain commodity will be entrusted to the private sector while the government, through the NFA, will be limited to buffer stocking of rice from local procurement only for emergency and calamity purposes.


“The Rice Tariffication Bill will place the food security of the country fully under an import liberalization regime. This means that our staple grain requirement will be sufficed by imports rather than the production of our local farmers. At the same time, rice imports do not equate to a steady supply of affordable rice for the poor. This was glaring in the first year of our accession to the World trade Organization’s Agreement on Agriculture in 1995 wherein our rice importation surged from 0 in 1994 to 257,260 MT in 1995, consistently increasing to 1.7 million MT by 2006,” she explained


It was in 1995 when the country experienced an almost total reliance on rice importation to support the local demand. It limited the government’s role to intervene and stabilize food supply. Private traders instigated a rice crisis situation that eventually led to price increases reaching 90-100%. Rice prices rose from Php 15/kg to Php 30/kg when these unscrupulous traders learned that the NFA could not intervene because of insufficient buffer stock.


This reoccurred in 2008, when the rice import volume at 2.4M metric tons was at its the highest in the history of Philippine rice imports. But with the global crisis, exporting countries such as Vietnam, where eighty-five (85%) of rice imports are coming from, restricted the release of their rice produce committed to the Philippines from 1.5M metric tons to only 1M metric tons. This was also accompanied by an unprecedented surge in the price of rice in the world markets. The price of Vietnam Rice doubled from $ 250 per metric ton FOB (Free on Board) to $ 500 per metric ton, with prices soaring to Php 50 to P60/kilo from Php 18 to 26/kilo.


“The government should reconsider its plan of increasing the price of rice at this time especially that Filipino families are already in excruciating poverty because of the staggering increase in the inflation. Rice liberalization did not bring us to a food-secure and self- sufficient stature on our local rice production. Instead, it has opened our local market to rice imports and will obliterate what’s left of local food production. The volatility of global rice prices would tell us that a reliance on rice imports would not mean an affordable rice, it would actually mean the opposite,” she said.


For reference:


Maria Finesa Cosico

Secretary General, AGHAM

0917-811-5445